Thursday, October 14, 2021

Flock Estate v Flock, 2021 ABQB 502

SUMMARY
Flock Estate v Flock, 2021 ABQB 502

The primary issue in this case was whether joint tenancy had been severed. The second issue was how property should be distributed, subject to the determination of the first issue.

HOLDING

The question before the Court is whether joint tenancy was or ought to be severed. On the first issue, the Court concluded Ms. Flock and Mr. Flock held the Property as tenants in common. On the second issue, the Court held 50% of the fair market value of the Property was to be paid to Mr. Flock.

BACKGROUND

Ms. Flock and Mr. Flock married in 1982. They purchased a home (“the Property”) together in 1993. Both their names were on title as joint tenants at the date of purchase. In 1994, the parties separated, and Mr. Flock moved out. The names of both Ms. Flock and Mr. Flock were on title on the date of her death in 2014.

Ms. Flock remained on the Property until her death in 2014, and in 1999 Mr. McKen moved into the Property.

Ms. Flock and Mr. McKen have paid for most of the expenses on the Property since Mr. Flock moved out, which includes the cost of maintenance and mortgage payments. Ms. Flock and Mr. McKen did not pay Mr. Flock occupation rent during the period they lived in the Property, and further, since Mr. Flock moved out, he did not financially contribute to the Property.

The application follows lengthy litigation between Ms. Flock and Mr. Flock on the matter of division of matrimonial property.

Difference between joint tenancy and tenancy in common

The most significant difference between tenancy and common and joint tenancy is the concept of “right of survivorship.” Under the right of survivorship, when one joint owner dies, their interest in the property is passed to the surviving co-owners. In comparison, under a tenancy in common, when one owner dies, their interest is passed to their Estate.

In this application, Mr. Flock argues that he owns the house in entirety, under the right of survivorship. Mr. McKen argues the joint tenancy was severed, and Mr. Flock owns on half of the value of the property as a tenant in common.

ISSUES

Has joint tenancy of the Property been severed? 
How should the Property be distributed?

LAW

A joint tenancy severs “when there is a disruption of unity of title, time, interest, and possession” at para 30.

There are three ways a joint tenancy can be severed:

By the unilateral act of one joint tenant with respect to his or her interest; 
By mutual agreement of both joint tenants; or 
By any course of dealing which shows that the interests of all were mutually treated as constituting a tenancy in common: Sorensen (Estate) v Sorensen(1977), 1977 CanLII 1648 (AB CA), 90 D.L.R. (3d) 26 (Alta. C.A.) at 32. Direct quote at para 31

A person may also apply to sever the joint tenancy pursuant to section 15 of the Law of Property Act.

ANALYSIS

In this case the argument in favour of severance before the Court was under #3, that the “course of dealing between the parties establishes that the interests of the parties were mutually treated as constituting a tenancy in common” at para 34.

Per #1, there has been no unilateral act to sever joint tenancy 
Per #2, there has been no mutual agreement that would sever the joint tenancy 
No one applied under section 15 to sever the joint tenancy.

The Court rejected that the ability to sever a joint tenancy is extinguished upon the death of a joint tenant.

The Honourable Madam Justice B.B. Johnston did not need to decide the case on the commencement of divorce proceedings and matrimonial proceedings alone. Rather, he relied on the totality of evidence which included:

Mr. Flock ceased living in the Property in September 1994. After this time, Mr. Flock ceased paying any of the expenses associated with the house until he started paying the property taxes in 2018. However, this occurred after the application to sever was filed; 
Ms. Flock remained in the residence until her death. Mr. McKen began to reside with her 
in the Property in 1999. The parties were married in 2009. Mr. McKen continues to
reside there to this date;
Ms. Flock and Mr. McKen expended $237,663 towards the maintenance and upkeep of the Property and $146,465 for renovations. The renovations were made without Mr. Flock’s consent or contribution;
The parties were engaged in contentious litigation for over two decades. The parties were divorced but continued to litigate. At the heart of the various actions was the division of matrimonial property including the valuation of the Property;
From July 1994 until 1999, Ms. Flock paid all expenses related to the Property. After Ms. Flock and Mr. McKen began to cohabit, Mr. McKen contributed to the expenses of the Property including the mortgage, insurance, utilities and maintenance. Mortgage payments included principal, interest and property taxes;
Following Ms. Flock’s death, Mr. McKen continued to pay the mortgage until it was  paid off in 2017; and
The decision to have Mr. McKen contribute to the costs of the house was, given the pending litigation, to ensure there was a record of Mr. McKen’s money being directed to the house.

Direct quote at para 48.

Justice Johnston further stated that the parties likely did not want the right of survivorship to apply, given the two parties were involved in litigation for over two decades.

Under the tenancy in common, Justice Johnston Ordered Mr. Flock receive half of the fair market value of the estate, and Mr. McKen receive the other half. Justice Johnston did not decrease the amount owed to Mr. Flock by the amount Ms. Flock and Mr. McKen had contributed towards the mortgage, maintenance and upgrades.